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Thursday, September 26, 2013

Toward Christian Economics

In July, Allan Carlson, as he usually does, gave a good defense of sane economics at an Intercollegiate Studies Institute debate.Forthwith, some highlights, but it is rewarding to read his remarks in their entirety.This may be done here:

I turn now to my remarks on the Industrial Revolution. To be sure, this event had sweeping effects on human life. Whether industrialization was pursued under the creed of Manchester liberalism, as in 19th Century Britain, or under the creed of Stalinist Marxism in the Soviet Union of the 1930s, or under the new hybrid creed of Communistic-Capitalism now found in China, some of industrialism’s effects have proved to be universal.

The most important of these, and the one most often forgotten, has been the wrenching apart of the workplace from the place of residence. Prior to industrialization, the vast majority of people — well over 90 percent — lived and worked in the same location, be it a peasant or family farm, a fisherman’s cottage, a nomad’s tent, or an artisan’s shop. This unity of workplace and home formed the normal, even natural, human experience. Men and women, joined in marriage, worked together to make their small enterprises a success, sorting out tasks according to their strengths and skills; and so finding a natural complementarity. Children, too, commonly found useful places within these small home economies.

The Industrial Revolution — resting on centralized factories and offices — tore these productive homes apart. The men moved into certain factories; the women moved into others; and, in the early decades, so did the children as well, most working 10 to 12 hour days, six days a week. Economic historian Karl Polanyi calls this change “The Great Transformation.” Francis Fukuyama prefers “the Great Disruption.” Both phrases capture the huge effects on human relationships of this event.

Industrialization, by definition, also has meant the progressive displacement of the home economy. In pre-industrial societies, most homesteads sought and achieved some degrees of self-sufficiency. They raised, and preserved their own food – grains, vegetables, and meat animals. They spun their own cloth and sewed their basic garments. They built their own shelters and raised their own draft animals for field work and transportation. At their best, as on the freehold peasant or family farm, these self-sufficient home economies delivered an autonomy, or freedom, that analysts of liberty such as Thomas Jefferson would admire.

Industrial Production means replacing these products and tasks of a home economy by industrially made goods and services. As it turned out, there would be no end to the process. It usually began with factory-spun cloth and world proceed relentlessly until family households would be stripped of virtually all productive functions, including in the end infant care and meal preparation ( in our terms think “daycare” and “fast food”).

Again, these effects are common to all industrial orders, be they of the classical liberal variety or of one of the socialist models. The conservative remembers that the gift of industrialization — a great array of commodities — has been accompanied by these large social costs.

. . . the spread of capitalism has depended on forced centralization and the power of the modern state for its effective operation. As Karl Polanyi has argued, there is nothing “natural” about laissez-faire. Rather, “far from doing away with the need for [state] control, regulation, and interventions, [laissez-faire capitalism] enormously increased their range.” Contrary to myth, the liberal market system of the 19th Century required “an enormous increased in the administrative functions of the state.” A central bureaucracy, backed by an efficient “minister of the police,” was needed to standardize weights and measures, destroy local restraints on trade, enforce contracts, protect shipping, collect debts, and guarantee an open labor market. This unitary market so used the law to crush local diversity and local economies. [The Great Transformation]

In practice, the modern administrative state and the capitalist economy actually grew in tandem, each feeding on the other. As economist Keith Rankin summarizes: “The tyranny of the self-regulating market can only become the central organizing mechanism if it is intentionally imposed on society by a government…and can only survive for any length of time if such a government resists the spontaneous human impulse toward protection.”

. . . modern laissez-faire capitalism thrives by embracing and promoting the deadly sins. As defined by Christian theologians, the seven deadly sins are wrath, greed, sloth, pride, lust, envy, and gluttony. I will grant that capitalism makes little, if any, use of wrath. But virtually the whole of the current consumer economy rests on the clever manipulation of greed, sloth, pride, lust, envy, and gluttony. Where would the “Mad Men” of contemporary Madison Avenue be without them? Such advertising may raise the Gross National Product somewhat, yet the sins behind it remain, corrupting the character of individuals and the culture as a whole.

. . . capitalism undermines natural human bonds and wages a relentless war against tradition. Economist Joseph Schumpeter viewed capitalism as an evolutionary system, one full of nervous energy, one that could leave nothing untouched and changed. This was and is the process of “Creative Destruction,” — his phrase — which “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” [Capitalism, Socialism & Democracy]

Capitalism also excels in leveling natural institutions — most notably, the family itself.

. . .

So, what is the alternative? Here, I lay out the argument of Wilhelm Roepke, advocate of the Humane Economy.

One foundation of his economic framework was Christian. A descendant of German Lutheran pastors, Roepke held to that concept which “makes man the image of God whom it is sinful to use as a means” and who holds inestimable value as a human being.” In place of homo economicus, he pointed to homo religiosus, religious man, fallen and redeemed.

A second foundation was Roepke’s devotion to a true free market. He argued that the idea of liberty had appeared uniquely in Christian Europe, and “that only a free economy is in accordance with man’s [spiritual] freedom and with the political and social structures…that safeguard it.”

Roepke’s third foundation for his economic views was the natural family. The true human being was not a radical individual, but rather someone embedded in natural social structures. Roepke held that the family, along with religion, did not exist for the state, but was “pre-statal, or even supra-statal.” Family life was “natural and free” and the “well ordered house” served as the very foundation of civilization. Rooted in monogamous marriage, the family was “the original and imperishable basis of every higher community.” The self-sufficient, autonomous family also stood first “in opposition to the arbitrary tendencies of the state.”

. . .

The restoration of private property was also central to Roepke’s vision. The true antithesis or alternative to socialist or collectivized man was the property holder. As Roepke explained, competition was only one of the pillars of a free economy. The other was personal and familial “self-sufficiency.” Accordingly, expansion of the sphere of competition should be balance by also enlarging what he called “the sphere of marketless self-sufficiency.”